Philippines Q2 GDP Growth Weakest in 3 Years

The Philippines economy grew an annual 6 percent year-on-year in the June quarter of 2018, following a downwardly revised 6.6 percent expansion in the previous quarter and below market consensus of 6.7 percent growth, as both government spending and private consumption rose softer while net external contributed negatively to growth. Meantime, investment continued to increase.

In the three months to June, government expenditure rose 11.9 percent, slower than a 13.6 percent growth in the March quarter. Meantime, household consumption expanded 5.6 percent year-on-year, compared to a 5.7 percent increase in the first quarter.

Net external contributed negatively to growth as exports rose less than imports.Exports increased by 13 percent, following a 6.5 percent rise in the first quarter. Sales of goods rose 13.9 percent (from 3.7 percent in the first quarter) and those of services went up 9.6 percent (from 16.4 percent). Meanwhile, imports rose faster by 19.7 percent, following a 9.6 percent rise in the preceding quarter.

On the production side, the services sector advanced 6.6 percent, compared to a 6.8 percent growth in the three months to March. Growth in the sector was supported by public administration & defense, compulsory social security (15 percent); financial intermediation (8.7 percent); transport, storage & communication (6.2 percent); trade and repair of motor vehicles, motorcycles, personal and household goods (6.1 percent); other services (5.8 percent), and real estate (3.7 percent). The industry sector expanded 6.3 percent, following a 7.7 percent growth in the preceding quarter. Output increases were seen in construction (13.5 percent), followed by manufacturing (5.6 percent), and electricity, gas and water supply (3.8 percent). Mining & quarrying went down by 10.9 percent, after a 6.9 percent rise in the March quarter. Meantime, agriculture, hunting, forestry and fishing rose 0.2 percent, easing from a 1.1 percent expansion in the previous period.

The government is targeting growth of 7-8 percent this year, which is more optimistic than the 6.8 percent growth forecast of the Asian Development Bank and the International Monetary Fund's 6.7 percent projection for 2018

On a quarter-on-quarter seasonally adjusted basis, the GDP advanced 1.3 percent from 1.5 percent expansion in the March quarter.

Chusnul | chusnul@tradingeconomics.com8/9/2018 10:16:02 AM

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